Why doesn’t the govt incentivise large corporations to encourage economic activity?

Nail on the head. Successive UK governments clearly hate the self employed and small businesses. Heaven knows why? Obviously too many politicians are in the pockets of big business so pander to their requirements and ignore the small businesses who don't have political influence.

I have no problem with a gov growing SMEs. The NI policy does the opposite though.

In the areas I work in the government is absolutely terrible at allocating money to projects.

The projects are normally pet, ie belong to one political party so get thrown out/defunded when the new lot get in, even if they are long term.

Government ministers are also notoriously technically illiterate and have the attention span of a peanut. They aren't interested in anything that will produce results on a longer timescale than when they next come up for election. They are interested in quick wins and headlines. But science and technology does not work like that.

The biggest idiocy I have seen recently is the government proposal to spend £20 billion on carbon capture projects, which is just out and out stupidity.

Fortunately this is "future loaded", ie they are promising to fund when they may not even be around to do it. Hopefully it will be split so they spend £1 million in this electoral cycle, and £19.999 billion in the next one when the incumbents can cancel it.

Supporting the "large corporations" looks good in theory, but it is a dangerous game. Large corporations are well able to move to wherever they want to and while creating jobs looks good on paper and makes great headlines for the government of the day, the jobs can just as quickly be lost by one bad decision or through the actions of another country or trading bloc.

A better question might be "Why doesn’t the govt incentivise small and medium-sized companies to encourage economic activity?"

SMEs account for 99% of the 5.5 million businesses in the UK. They employ 60% of the employees in the UK (over 16 million people) and account for around half of the turnover of the UK private sector.

In countries like Germany, Netherlands, Austria and in Scandinavia, SMEs receive huge government support - not just financial, but in the form of training facilities, simplified reporting, Chambers of Commerce and Trade organisations that actively work with the government to keep this sector bouyant. Germany's post-war "Wirtschaftswunder" recovery was driven largely by the SMEs.

In the UK, the government hardly gives SMEs the time of day - preferring to cozy up to big foreign companies (who then demand huge grants and tax-breaks under the threat of closing the UK factories and moving elsewhere) or to their donors.

Except all the more highly paid workers who have jobs working for those businesses, paying taxes in the UK and buying goods/services in the UK.

But the thing I don't like is "targetted" incentives that aren't open to all, i.e. Brown's "sweatheart" deals in the noughties such as to incentivise Vodafone to set up in the UK - that's blatant unfair competition if the same kind of deals aren't available to all firms.

Same with how the big employees get grants/incentives, etc but small businesses, self employed, etc., don't. Again, the idea is right to get big employers to the UK (or poorer regions within the UK), but there should be comparable incentives for self employed and small businesses, otherwise there's unfair competition etc.

I really wish we could go back to the 80s and 90s where there was lots of support for small businesses, new business start ups, getting unemployed back to work, etc. It mostly worked well and helped drive the growth in the late 90s (I think the last time we didn't have a deficit was late 90s/early 00s on the back of the enterprise and business push of the prior decade or two).

It’s about more than tax. Ireland is HQ or European hub to over 1,000 companies.
8 of top ten pharma and gaming and 9/10 ICT. Google, HP, Apple, Facebook, LinkedIn, Pfizer, GSK and IBM. Due to tax, tax treaties with other countries, regulatory environment (including intellectual property) but also ranks seven points higher than UK for percentage of population educated to degree level. Degrees are highly valued for US companies in particular. It’s English speaking, high quality of life and access to the Eurozone.

I think that will be sorted out once unemployment starts rising due to employers NI/workers rights changes unfortunately. And increased competition if the Government's aim in getting people off PIP has an effect and obviously increased immigration..Rachel Reeves also wants to lay off thousands of civil servants. It's a bad time to be picky about wages as someone else will jump to take your place. It's pants.

Stagnated wages are not going to attract people back into the office space.

I am looking for another job at the moment and all of them are offering well below market rate to make it even worth it WFH!! Nevermind trudging into an office spending money on train, coffee, lunch, snacks, another coffee etc.

Pay more and people might spend more. Make it actually worth my while to come into the office outside of business needs.

Large businesses making everyone else richer there's only one person getting rich from large business 😂😂

What's Trump going to do about the actual reason Ireland attracted these businesses which is the very low corporation tax. Big Orange won't like that!

Businesses aren't charities. They aren't aimed at the public good. They are aimed at benefiting their shareholders. They aren't usually required to benefit anyone else.

Ultimately though many pension funds own shares, businesses pay tax and businesses employ people so there is a public good.

I am in a small Irish city. So not Dublin cork limerick etc and we have 5 global pharmaceutical companies and several other smaller ones. And then a multitude of companies that serve those companies. Lots of work in the industry here.

They did this in Ireland, they have literally build the country around pharmaceutical industry and tech, and not just by incentivising the companies but by ploughing money and education into the people also. We are a highly skilled and educated workforce because of this. This has been a long time in the making.

Because it's cheaper to employ people in developing countries. You can get two or three people in India compared to the one person in the UK. Then there's also the corporation tax, and now increased NI contributions which will be cheaper offshore or non existant. And less human rights/HR issues than in the UK.

Makes sense from a business perspective to send the work abroad.

Yep it’s a bad idea to put a tax on work. It’s halved growth so far. Not sure this gov have realised.

No one wants to turn those spaces into homes though as it isn’t profitable. Where I live thousands of homes are being built on green field sites with a few token affordable homes thrown in

I’ve not said about putting a cap on economic activity at all but likewise I don’t want to see the government have to subsidise businesses to come here to such an extent that we gain nothing. As others have pointed out we aren’t on a level playing field to India, our wages costs are far in excess, even if we incentivised businesses to come here wages in India will always be cheaper for the foreseeable.

Free trade deals between states tend to include terms that prevent countries from countries from offering incentives like you describe.

For example the World Trade Organisation’s model convention includes terms that prevent subsidies and inducements being offered. Fair competition is what is needed.

Ireland induced Apple through its tax system and got its fingers burned. India is not a good example to follow.

I agree with you OP and Covid meant that plans for large scale deregulation after Brexit were not only shelved but reversed.

I would love to see more incentives for businesses of all sizes in this country. We have the talent and the capital here but much of it is now headed overseas.

Don’t be surprised about this. People here are typical braindead socialists. Equality, even if everyone’s equally poor.

We don't need to build any more offices. There is a whole business park next to where I live thats turned into a ghost town. Literally dozens upon dozens of huge spaces, completely empty.
Companies don't want to pay the rents when they can just have people work from home costing them nothing. I would imagine buildings, and staff, are somewhat cheaper in India.
What we actually need where I live is housing, there is none. Theses spaces should be turned into homes.

Have you seen this government stuffed full of unemployables and ex charity workers. The last one wasn’t much better, or the one before that.

These people have never had real jobs or understand how generating profit or wealth works. They are basically of the lowest intellect and employability. The private sector wouldn’t touch these people with a barge pole. That’s why they don’t know how to incentivize business investment more. And that why Rachel from accounts (accused of fiddling her expenses in her previous job) had crashed the economy.

The wage bill between here and India / China / anywhere more recently industiralied will be significantly cheaper....along with fewer regulation in relation to workers rights such as sick pay, holiday pay, occupational health etc rather than generally exploiting your workers. In addition, there will be more environmental constraints e.g. not tipping toxic waste into rivers but having to pay for its safe (more expensive) disposal. Its not just about taxes it's everything to do with the costs of running a business. We want our products and services as cheap as possible and companies respond by trying to provide them as cheap as possible. Why do you think all our traditional industries were outsourced in the first place?

1. They do.
2. Brexit and associated issues. There's a reason Ireland has gone down this route.
3. Saying 'why can't country X be just like country Y' ignores a lot of complex factors. It's a bit more complicated than that.